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PM and Osborne set out growth plan

David Cameron and George Osborne have pitched themselves as the economic team to win the next election as they defended their record on tax and set out their vision for infrastructure-led growth.

The Prime Minister, fresh from a family holiday in Lanzarote, was joined by the Chancellor at a visit for the first time in several years in an effort to push the Government's economic message.

The pair claimed more than 150,000 jobs could be created by £36 billion of infrastructure projects being started in the UK this year.

But they were forced to defend their record on tax - saying the scrapped 50p top rate sent a "terrible signal" and that they chose to raise the personal allowance over other tax changes.

During a question and answer session at the offices of leading construction company Skanska in Hertfordshire, they were asked why they did not adjust the threshold for the 40p rate in line with inflation to stop more middle earners being dragged into paying it.

Mr Cameron replied: "It was a French prime minister who once said to govern is to choose. We had to make a choice about when we did have money to make available how should we spend it, how should we help people.

"And the choice we made was to help the lowest paid by taking now over two million of them out of income tax altogether by introducing that increase in the personal allowance to £10,000."

He went on to justify the decision to cut the 50p tax rate, which has been characterised by Labour as a "tax cut for millionaires".

The Prime Minister admitted it was an unpopular decision.

He said: "Cutting the highest rate of tax from 50p to 45p as the Chancellor said, that was a bad signal. We had a higher top rate of tax than other European countries. We thought that we would lose revenue, that it was a bad signal for Britain so we took the unpopular decision.

"But the real weight of our tax reform was about helping the lowest paid in our country."

Meanwhile, Mr Osborne pitched himself and Mr Cameron as the economic team to beat Labour at the 2015 general election.

Some may see the language as an attempt to capitalise on opinion polls which put the Tory team ahead of Labour's Ed Miliband and Ed Balls on the economy.

The Chancellor said: "We are an economic team led by a very strong Prime Minister and we set out to the country four years ago the difficult decisions that we had to take as a country together and explain to people what those decisions were. As a team we have delivered those decisions and as a result you have see the jobs being created in our economy.

"But the work is not done and we have got to go on working through this economic plan and we have got to make a choice as a country about the team we want to help manage the economy but also the direction we want Britain to go in."

Mr Cameron and Mr Osborne announced 200 rail, road, local transport, broadband, airport and waste management projects are due to start construction over the next year.

Flood defences were also on the list after devastating winter weather left certain areas of Britain under water.

That work is alongside 200 infrastructure projects that would be completed this year.

The £36 billion in infrastructure spending will come from £5 billion public investment, £21 billion private and £10 billion in joint funding.

Downing Street said the figure of 150,000 jobs was calculated using Office of National Statistics data

But Labour claimed infrastructure output has fallen by more than 10% under the coalition.

Shadow Treasury minister Chris Leslie said: "We need action not words on infrastructure if we're to get a recovery built to last.

"Under David Cameron and George Osborne, despite multiple infrastructure plans and reheated announcements like today's, infrastructure output in the economy is down more than 10%.

"The Government's overall infrastructure pipeline in December showed fewer than a quarter of projects 'in construction'.

"We are seeing the lowest peacetime level of house-building since the 1920s and more cuts are planned to capital spending next year.

"Investors need certainty and delivery, not just another load of warm words."

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